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Hurdle for Nokia's Christmas Launch - Analyst Blog

Going by the recent market buzz,
Nokia
(
NOK
) is set to launch its Window 8-based tablets this Christmas.

Following their successful smartphone venture, both Nokia and
Microsoft Corporation
(
MSFT
) are eyeing the lucrative tablet market, which is showing signs of
significant growth. The tablet market has grown by 150% since last
year. So in order to seize the opportunity, the company plans to
launch the Window 8-based tablets by the end of fiscal 2012.

The new 10-inch tablet will be based on latest Windows 8
platform and powered by
Qualcomm Inc
.'s (
QCOM
) Snapdragon processor, which supports better battery life and high
quality HD videos. It is also believed that Taiwan-based
manufacturing firm Compal Electronics has gained 200,000 tablets
contract from Nokia.

Earlier, in November, 2011, Nokia launched its Window-based
Lumia series of smartphones. So going by this trend it is highly
anticipated that the company will also release its new tablet
device during that period of the year, which happens to be one of
the profitable months for all electronic device manufacturers.

However, we believe that the launch of Windows 8-based tablets
will have less impact on Nokia's market share due to the following
reasons. Firstly, Nokia is a late entrant in the tablet market,
which is currently dominated by
Apple Inc
's (
AAPL
) iPad (58% market share). By the time Nokia will launch its
tablet, iPad 3 will establish its strong foothold in different
markets across the world.

Thirdly, tablet market is growing by leaps and bounds, so in
order join the bandwagon; most companies will be launching their
tablets in the upcoming quarters. Moreover, companies like
Research In Motion Ltd.
, (
RIMM
),
Sony Corporation
(
SNE
) and Samsung Electronics will launch their most advanced tablets,
which we believe will further increase competition going
forward.

We maintain our long-term Neutral recommendation for Nokia.
Currently, Nokia has a Zacks #3 Rank, implying a short-term Hold
rating on the stock.

Our view

We believe that higher proliferation of tablet sales has
prompted Nokia to enter the tablet market. As per the IHS iSuppli
Application Market Forecast, tablet devices are currently ranked at
the eight spot in the overall consumer electronics goods segment
and are expected to jump to fifth spot in fiscal 2012.

Growing market trends influenced Nokia to target the tablet
market to mitigate its deteriorating sales and regain its lost
market share.

Based in Espoo, Finland, Nokia Corporation is the largest mobile
phone maker of the world. The company also provides Internet
services, comprehensive digital map information, and equipment,
solutions and services throughout the world.

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